Pay As You Earn (PAYE)
Most people pay Income Tax through PAYE. This is the system your employer or pension provider uses to take Income Tax and National Insurance contributions before they pay your wages or pension. Your tax code tells your employer how much to deduct.
Your tax code can take account of state benefits, so if you owe tax on them (eg the State Pension) it’s usually taken automatically from your other income.
Self Assessment tax returns
If your financial affairs are more complex (eg you’re self-employed or have a high income) you may pay Income Tax and National Insurance through Self Assessment. You’ll need to fill in a tax return every year.
Income Tax on savings and investment interest
Income Tax is usually taken from interest on savings and investments automatically.